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Three cheers for De Beers

Three cheers for De Beers

Diamond giant pays over P12 billion in taxes and economic contribution

De Beers Group, through its parent company, Anglo American, has announced it spent US$1, 219.8 million (over P12 billion) in taxes and economic contribution in Botswana over the past year.

Breaking down the numbers in its 2020 Tax and Economic Contribution Report, the mining giant revealed US$190.8 million was in royalties and taxes while US$246.9 million went towards corporate income tax.

The group further spent a total of US$81 million in wages to its local employees, an amount that excludes contractors and certain associates, and joint venture employees.

It also forked out US$446.4 million in procuring goods and services from within the country.

De Beers, together with the Botswana government operates a 50/50 joint venture, Debswana. Until the recent closure of Damtshaa Mine, this consisted of four open-cast diamond mines: Orapa, Letlhakane, and Jwaneng (the richest by value).

Anglo American CEO, Mark Cutifani noted alongside the group’s broader purpose, its tax strategy and the principles on which it is built mean Anglo American continue to make a very significant tax and economic contribution.

He said this reflects the continuing benefit of the group’s operations to its stakeholders and the countries it operates in through the cycle and the economic and social shock of a pandemic.

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“A sustainable business is purposeful, competitive, resilient, and agile; it’s a business that thrives through both economic and social cycles. Sustainability – providing for the well-being of future generations while protecting our natural resources – is in our DNA and at the heart of our business strategy,” highlighted Cutifani.

He further pointed out that despite 10 percent lower total production volumes, the mining giant increased its mining Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) margin to 43 percent, supported by solid cost control, a strong contribution from marketing and price strength in many of the products.

“Operating profit decreased by nine percent to $5.6 billion, with profit attributable to equity shareholders amounting to $2.1 billion, a 41 percent decrease. Our return on capital employed of 17 percent was above our targeted 15 percent through-the-cycle return,” said Cutifani.

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